City Logistics recently sold their 42 000 m2 Riverhorse facility in KwaZulu-Natal to Boxwood Property Fund for an undisclosed sum. This marks another piece of good news for the industrial property sector, which has remained unusually resilient since the start of the COVID-19 pandemic.
“This transaction signals confidence in the logistics sector and high demand for long-term leases with strong covenants”, says John Jack, CEO of Galetti Corporate Real Estate.
“The timing couldn’t have been better; Boxwood Property Fund’s strong balance sheet coupled with CEO, Rob Kane’s directive to move the fund into the logistics sector made for a perfect match.”
While some investors continue to lay low during the COVID-19 pandemic, Boxwood Property Fund sees this period as a time for opportunity.
Sarah Divaris, Asset Manager for Boxwood Property Fund comments that the company’s investment strategy has always been two-prong. “Our initial focus was on the redevelopment assets in Cape Town CBD. The second phase is lower risk, well-located industrial assets with good fundamentals and strong tenant covenants”,
“We began moving into this second phase towards the end of 2019 with the acquisition of Builders Warehouse in Cape Gate”, she adds.
“We are analytical in our approach and are actively looking for assets, like City Logistics, that tick all the boxes.”
Founded in 1988, City Logistics is the largest privately-owned logistics company in Southern Africa. The company’s infrastructure spans more than 1 200 fleet vehicles, 17 Depots and 250 000m2 of warehouse space across South Africa, Botswana, and Namibia.
Ryan Gaines, CEO of City Logistics says that the facility is perfectly situated in a sought-after node of Durban. “We built the premises in 2006 and have since invested heavily in upgrades to the facility since then. We have always seen the long-term value in the property”,
Speaking to the success of the sale, Gaines believes that the long-standing, reputable tenant coupled with the upkeep of the premises made for a fair sale price - given the current market conditions.